U.S. v. Kozeny, et al., No. 05-cr-518 (S.D.N.Y. 2005)
Viktor Kozeny; David Pinkerton; Hans Bodmer; Omega Advisors; Clayton Lewis; and Thomas Farrell.
Following his conviction, Bourke has argued in post-trial briefs that the court erred by charging the jury on conscious avoidance and willful blindness of the alleged bribery scheme because the prosecution stated in closing argument that it had one theory, that Bourke knew about the conspiracy and he joined it. Bourke has contended post-trial that the government's evidence supports, at most, a finding of negligence, not conscious avoidance of knowledge of bribes paid to the Azerbaijani officials and that, moreover, there was insufficient evidence of actual knowledge to support a conviction. These questions will likely be further litigated on appeal.
Bourke is expected to also raise on appeal that the trial court erred in refusing to instruct the jury on an extortion defense, arguing that the alleged payments were the result of extortion under Azeri law and therefore legal.
Bourke met the test for release pending appeal upon a showing of clear and convincing evidence that he is not likely to flee or pose a danger to the community, and that his appeal is not for the purposes of delay.
Prosecutors admitted during Bourke's appeal in the Second Circuit that they knew a government witness, Hans Bodmer, might give false testimony.
Energy (Non-Utility)-Oil & Gas-Exploration/Production
1997; 1998; 1999
A senior Azeri government official; senior official of State Oil Company of Azerbaijan Republic ("SOCAR"); two senior officials of Azerbaijan's State Property Committee.
A federal grand jury indicted Bourke along with Viktor Kozeny, the alleged mastermind of a wide ranging bribery scheme connected to investing in the privatization of SOCAR in Azerbaijan. Bourke was the principal shareholder of an investment vehicle named Blueport International, Ltd. According to the indictment, in or about March and July 1998, Blueport invested a total of $8 million in Oily Rock, a company founded by Kozeny for the purpose of investing in SOCAR. $5.3 million of that investment was comprised of Bourke's personal funds.
According to the government's theory of the case, Bourke made this investment based in part on his understanding that Kozeny had and would pay bribes to Azeri officials to ensure SOCAR's privatization and Oily Rock's participation in the privatization. Bourke also allegedly assisted in arranging for medical treatment for two Azeri officials in New York on three separate occasions.
At Bourke's 2009 trial, two defendants from related cases named as Bourke's co-conspirators, Hans Bodmer and Thomas Farrell, testified for the government that Kozeny had direct knowledge of bribe payments related to the SOCAR investments.
In July 2009, a jury found Bourke guilty of one count of conspiracy to violate the FCPA and Travel Act and one count of making false statements to the FBI. He was acquitted of a money laundering conspiracy count. The court had previously dismissed other counts alleged in the original indictment as time barred. Bourke was sentenced to a year and a day in prison, but was released on bail pending his appeal.
After the trial judge denied Bourke's motion to set aside the verdict and motion for new trial, Bourke filed a notice of appeal. On March 9, 2011 Bourke moved for a new trial based on newly discovered evidence, claiming that, based on statements made by the prosecution at oral argument in the Second Circuit, the prosecution knew that Bodmer lied at Bourke’s original trial. On December 14, 2011, the Second Circuit affirmed the jury verdict against Bourke. The next day, the trial court denied Bourke’s motion for a new trial, rejecting Bourke’s contention that the government knowingly permitted the introduction of false testimony.
Conspiracy - Anti-Bribery
Conspiracy - Travel Act
Conviction, Fine, Imprisonment
$1 million criminal fine due at end of incarceration plus $200 special assessment.
In addition to a prison sentence of one year and one day, Bourke is sentenced to three years supervised release. He remains released pending appeal of his conviction.
Azerbaijan, Netherlands, Switzerland, United States
As noted above, a noteworthy aspect of this trial and a subject likely to be further litigated on appeal, is whether the court properly charged the jury on the standard of conscious avoidance or willful blindness and whether the jury could have found Bourke to have had the requisite state of mind based on the evidence presented at trial.
The trial court held that for purposes of the affirmative defense of legality under the written law it is insufficient that the law merely relieve the payor of criminal liability. Instead, the payment itself must be legal.
The trial court rejected the view that economic extortion can be a defense to an FCPA bribery charge, stating that the jury would receive an instruction on extortion only if the defendant laid a sufficient evidentiary foundation of "true extortion," which would involve threats of injury, death, or destruction rather than business demands.
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